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AFHE members are encouraged to submit articles for posting.  To have your article posted, please email the AFHE Office a copy of the article.  The article will be reviewed and posted upon approval.

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  • 31 Jan 2018 1:34 PM | Anonymous

    Every family has values, right? Do the decisions you make as a family accurately reflect your values?

    By Nicole A. Van Peursem

    Vogel Consulting

    Before discussing family values and the important role they play in multi-generational family dynamics we must first define the term. I’ve settled on dictionary.com’s concise entry:

    family values, plural noun
    The moral and ethical principles traditionally upheld and transmitted within a family, as honesty, loyalty, industry, and faith.

    Now that we’ve defined the phrase “Family Values” I am going to assume that we all agree shared values within a family are important. How important? It depends on your values. Do you value harmony over honesty? Tradition over independence? While outlining this article I Googled and reviewed lists of values, and I’d like to share my favorites:

    • Honesty
    • Responsibility
    • Respect
    • Belonging
    • Generosity
    • Community Involvement
    • Tradition
    • Privacy
    • Independence
    • Communication
    • Trust
    • Spirituality

    You will notice that I did not number these values. That was no accident. Creating a ranking would force me to prioritize these values and it is not necessary to do so.

    Reread the list of values and now ask yourself:

    What do you value?
    What does your family value?
    Are any of your values at odds?


    If you find you’re having difficulty defining your values look around the room you are in. What do you see? Look at what’s there as well as what is not there. (And just because it’s not there doesn’t mean it’s “missing”). If how you live your life and how you allocate your resources are outward expressions of your values, a quick tour through your home or office will be an easy way to get you thinking about the values you project.

    According to Rhona Vogel, President and Founder of Vogel Consulting, family values must be lived. “Values must first be articulated in an informal context. If a family demonstrates and really lives its values, the next generation will instinctively understand what the family stands for. As the old saying goes, actions speak louder than words.”

    Formal meetings to discuss family values are not always necessary. Every day life provides many opportunities and Vogel recommends starting young. “Simple things like giving your child a piggy bank, and allowing them to chose how much to spend, how much to save and how and when to donate to others, are easy ways to engage young ones. Years later, I recommend encouraging teens to find a part time job.” As a parent myself, I recognize that teaching values to my children is easier said than done. While every parent wants to provide ample opportunity for their children to learn, how many parents are willing to allow their children to fail? “Allowing children to fail means allowing them to grow. Those lessons may seem insignificant while they are young, but it’s a great way for them to learn about themselves and their own values and priorities,” says Vogel.

    If a family does not invest time and effort into building shared family values, conflict is likely. Barb Langkau, Client Service Director at Vogel, sees conflicting values as a major source of family dissonance. “So many family disagreements are the product of clashing values, or individual family members’ different interpretation of the same value. For example, the third generation grandchild may respect family traditions, but having known no other lifestyle, has a hard time appreciating those traditions or what they mean to the wealth creating generation.”

    If you are having difficulty answering the values question perhaps your family should formally discuss the topic. I have seen many family meeting agendas with headings such as “Annual Meeting” or “Quarterly Planning Meeting”. While you may take time to talk about risk tolerance and investment style, how much time does your family dedicate to discussing your shared principles? If your family is struggling to work through a difficult decision, creating an agenda titled “Family Values” can provide a forum for the multigenerational family to reaffirm what’s most important. Just as a family is a collection of individuals, so each family’s values will be a collection of individual values. Taking the time to discuss and acknowledge different values can help strengthen a family. And, if communication, tradition, and preservation are values your family holds, such a meeting will be time well spent.

    Langkau has seen this first hand. “Often, younger family members do not feel comfortable stating opinions different than those of their family elders. Teens and adult children may admire the generosity of the wealth creating generation, but it’s not uncommon for those second and third generations to feel some resentment as well. Not wanting to look greedy, they may feel entitled to money that is being given away, or want more control over how donations are made,” says Langkau. An independent facilitator can create a comfortable situation allowing all family members to openly share their opinions. This can be accomplished through individual, private discussions that are summarized and presented to the family as a whole. During the process you may learn that your family values harmony (conflict avoidance) over honesty and communication (conflict resolution).

    Discussing your values may help you answer the difficult question Steffi Claiden posed last month, “So what do you want? What do you really, really want?” If you know your family values, and can tell your advisor what you really want, developing the appropriate wealth management strategy will be a much easier process for both you, your family and your advisors.

     

    DISCLOSURE

    To ensure compliance with Treasury Circular 230, we are required to inform you that any advice concerning tax issues contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of avoiding any penalties that may be imposed by any governmental taxing authority or agency.

  • 25 Jan 2018 2:04 PM | Anonymous

    On Wednesday, April 6, the Department of Labor released the final version of its highly anticipated “fiduciary rule.” The final rule is the culmination of six years of study, commentary and revisions after the rule was initially proposed in October of 2010 (later withdrawn) and released again on April 20, 2015. The essence of the rule—to subject more advisers of employee benefit plan participants to the fiduciary standards of ERISA—remains unchanged from the 2015 proposal, but the Department of Labor made several key concessions to ease the burden on advisers.

    More information is located HERE (PDF)


  • 23 Jan 2018 10:21 AM | Anonymous

    By: Amelia Renkert-Thomas & Roy Kozupsky

    Estate planning for family business owners is big business for many wealth advisors. Fueling this area of work is a combination of factors, including the historically large (and at least for now increasing) federal estate tax exemptions. Congressional leaders perennially raise the possibility of changing the estate tax regime. This tumultuous political debate about rates and exemptions is wonderful fuel for those ever-present emotions of opportunity and fear, which seem to be the active ingredients in motivating families to consider transferring their wealth, including the family business, to their descendants.

    Click here to view the Article - (PDF 0.68M)

  • 23 Jan 2018 10:20 AM | Anonymous

    Passing the family business with a Charitable Remainder Trust

    By: Dana L. Mark

    A question for our readers: A charitable remainder trust can (a) benefit family members, (b) benefit charity, (c) help di- versify assets in a tax efficient manner, or (d) all of the above? The answer is (d).
    A charitable remainder trust (“CRT”) can provide you, your spouse, or other beneficiaries with lifetime income (annually either a fixed amount or a percentage of the trust’s value (which will increase or decrease as the value of the trust changes)). When your interest in the trust ends, the balance remaining passes to charity. At the time you set up the CRT, you receive a charitable income tax deduction for the value of the charity’s interest.

    Significantly, a CRT is a tax exempt entity.

    INSIDE OUT: RETHINKING ESTATE PLANNING FOR FAMILY BUSINESSES

    By: Roy P. Kozupsky, Esq. & Amelia (“Amy”) Renkert-Thomas

    Estate planning for family business owners is big business for many wealth advisors. Fueling this area of work is a combination of factors including the historically large (and at least for now increasing) federal estate tax exemptions. Congressional leaders, in their redundant debate, perennially raise the possibility of changing the estate tax regime. Both sides seem politically persuasive. The left argues that tax revenues are needed and warns that large amounts of wealth being transferred to future generations will create a dynastic social atmosphere that will weaken the entrepreneurial fabric of America’s culture. The right is less strident, but the Red States’ populist electorate and the ongoing need for tax revenues suggest that the estate tax will not be repealed any day soon. This tumultuous political debate about rates and exemptions is wonderful fuel for those ever-present human emotions of opportunity and fear, which seem to be the active ingredients in motivating families to consider trans- ferring their wealth, including the family business, to their descendants.

    Click here to view these Articles - (PDF 0.88M)

  • 23 Jan 2018 10:17 AM | Anonymous

    In any complex system, effective collaboration is essential toward achieving desired outcomes. It follows that if group dynamics are drivers of collaborative success or dysfunction, there is significant industry-wide work to be done toward enhancing wealth advisory collaboration on behalf of families.

    Click here to view this Article - (PDF 0.3M)

    A collaboration of G. Scott Budge PhD and Gregory T. Rogers with Brian Douglass

  • 23 Jan 2018 10:15 AM | Anonymous

    Estate planning for family business owners is big business for many wealth advisors, not only because of the large (and increas- ing) federal estate tax exemption but also because Congressional leaders perennially raise the possibility of raising estate and gift tax rates or cutting exemptions. Those ever-present human emotions of opportu- nity and fear seem to be the active ingre- dients in motivating families to consider transferring their wealth, including the family business, to their descendants.

    Click here to view this Article - (PDF 0.6M)

    Submitted by By Roy  P.  Kozupsky,  Esq.  &  Amelia  (“Amy”)  Renkert-­Thomas

  • 23 Jan 2018 10:14 AM | Anonymous

    The family business is as old as commerce itself. The first businesses were family businesses, and the great majority of businesses throughout history have been family businesses. Today, 92% of businesses are family-owned and 60% of the U.S. workforce is employed in a family-owned business.

    Click here to view this Article - (PDF 1.6M)

    Submitted by By Greg Cox

  • 23 Jan 2018 10:07 AM | Anonymous

    This is a tale of a shoemaker who was so busy making everyone else's shoes that he forgot about his own. We all have plenty of time to get to the "paperwork" of our estate planning done, right?

    Click here to view this Article - (PDF 381k)

    Submitted by Dan Rupar Chair, Trust & Estates Practice Group

  • 23 Jan 2018 10:06 AM | Anonymous

    We are all guilty of the same poor buying habits when walking into a supermarket resulting in some not- so nutritious purchases. Researchers know these bad habits. And of course, so do the supermarkets who are sell- ing us their products. For instance, although most of us know what we want to buy even before we enter those slid- ing doors we often walk out with other purchases-some of which we prob- ably don’t need at home. Here’s why: unless you are laser like in knowing what you want to purchase it is very easy to get distracted with all the other items at your fingertips. For instance, the most expensive items to be found are at eye level, commonly purchased items are found in the middle of any aisle-walk a further distance and you go past more products to buy; and of course those products at the check-out counters are there for a reason-they might not be good for your health but they register a lot of sales! And hard to believe, but retailers even know that left to their own devices shoppers tend to veer to their right as they shop!

    Click here to view this Article - (PDF 1.1M)

    Submitted by Roy P. Kozupsky, Esq. & Dr. G Scott Budge

  • 23 Jan 2018 10:05 AM | Anonymous

    Those who practice in the areas of estate planning have no doubt heard of the significant transfer of wealth that will occur over approximately the next 50 years. A significant portion of that wealth transfer will include the transfer of family businesses.

    Click here to view this Article - (PDF 57k)

    Submitted by Mark E. Kellogg, J.D., CPA

    Fraser Trebilcock

    http://www.fraserlawfirm.com
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